| Snowflake Score | |
|---|---|
| Valuation | 5/6 |
| Future Growth | 1/6 |
| Past Performance | 2/6 |
| Financial Health | 6/6 |
| Dividends | 6/6 |
KEY Stock Overview
KeyCorp operates as the holding company for KeyBank National Association that provides various retail and commercial banking products and services in the United States.
Rewards
Risk Analysis
No risks detected for KEY from our risk checks.
KeyCorp Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$19.21 |
| 52 Week High | US$27.17 |
| 52 Week Low | US$16.41 |
| Beta | 1.32 |
| 1 Month Change | 10.98% |
| 3 Month Change | 3.17% |
| 1 Year Change | -7.78% |
| 3 Year Change | 20.67% |
| 5 Year Change | 7.98% |
| Change since IPO | 121.12% |
Recent News & Updates
KeyCorp: A High-Yielding Bank Trading Down In The Dumps
KeyCorp is a well-run bank that is seeing improving trends and is positioned for loan growth. Management can return significant value to shareholders simply by repurchasing shares at the current price. Shares are attractively valued, pay a solid dividend yield, and have significant upside potential. Banks continue to trade rather cheaply relative to the overall market. This presents patient investors an opportunity to layer capital into this beaten down sector while getting paid an attractive dividend yield. While the larger banks such as JPMorgan Chase (JPM) and Bank of America (BAC) attract a lot of attention, there are regional banks out there that are also value-priced while throwing off an even higher yield. This brings me to KeyCorp (KEY), which is trading materially below its 52-week high of $27 achieved as recently as February of this year. In this article, I highlight what makes KEY an attractive opportunity for income and growth. Why KEY? KeyCorp is a top 20 regional bank in the U.S., with assets of over $170 billion. It's primarily centered around Ohio and New York with a footprint in a total of 16 states. KeyCorp operates as both a community and corporate bank, serving middle-market commercial clients. KeyCorp has undergone drastic changes to its operating model since the Great Financial crisis, when it was forced to cut its dividend due to its foray into higher-risk commercial and construction-related lending in states outside of its footprint. Since then, management has wound down those businesses, and refocused the company towards core corporate banking and capital market services. Morningstar carries a favorable view of KEY's turnaround efforts, as noted in its recent analyst report: KeyCorp’s noninterest income comes primarily from investment banking and asset and trust management services. While noninterest income did not grow substantially for the decade prior to 2019, we think the bank has turned a corner here. We like that KeyCorp is expanding its relatively new credit card income base as well as its own mortgage and capital markets operations. These efforts have largely paid off, and we think fees will be consistently higher from 2020 forward than they were for the previous decade. We expect the bank to continue to remain very competitive in its core middle-market niche, while also building out its focused retail operations. Meanwhile, the bank is executing well amidst the market volatility, with revenue growing by 6% on a sequential basis (1% YoY) during the second quarter. Moreover, it posted strong earnings of $0.54 per share, beating analyst estimates by $0.02, and saw a robust 20.9% return on average tangible common equity. These results were driven by strong loan growth across commercial and consumer businesses and higher interest rates, with net interest margin rising by 9 basis points, and net interest income increasing by 8% from the first quarter to $1.1 billion. Also encouraging, KEY continued to gain market share and is seeing positive operating leverage due to increased corporate and bank-level efficiencies. Net charge-offs also remained low, at just 16 basis points. Headwinds include average deposits declining by 1.8% from Q1, but I'm not concerned, as this reflects seasonal commercial outflows and public sector deposit outflows related to stimulus funds. It's also worth noting that KeyCorp, like most banks, lacks an economic moat, especially considering its fragmented branch footprint which makes it harder to gain efficient scale. Nonetheless, I see management positioning the company for growth, as it recently acquired GradFin, a leading loan counselor for healthcare professionals. KEY also expanded its embedded banking platform which added new payments facilitation capabilities. Management is also aggressively targeting loan growth this year in the 9-11% range, and explained how it expects to achieve this goal during the Q&A session of the recent conference call: Q: So looking at the updated guidance and specifically I’m looking at the 9% to 11% loan growth and 1% to 3% decline in deposits, which is a pretty wide mismatch, how do you plan to fund loan growth beyond 2022? And at what loan-to-deposit ratio do you need to start fully funding loan growth one for one with deposits? A: As far as the loan growth, you’re right, the updated guidance is 9% to 11%. Deposits are expected to be up 1% to 3% year-over-year. That implies relatively stable deposits through the rest of the year. We do have some investment security maturities. We also will tap the wholesale market as far as funding that one of the benefits of originating residential real estate loans adds to our capacity as far as borrowing at the home loan and we can do that in a cost-effective way. Loan-to-deposit ratios were currently below 80% on our balance sheet. Typically, we would target between 90% and 95% loan-to-deposit ratio. So we’ve got plenty of room to work through that. I would say that we will continue to monitor this. But as Chris has highlighted a couple of times, we want to support our customers. And in these markets, we are going to see more customer demand for loans than we are probably going to see for capital markets opportunities.
KeyCorp Q2 2022 Earnings Preview
KeyCorp (NYSE:KEY) is scheduled to announce Q2 earnings results on Thursday, July 21st, before market open. The consensus EPS Estimate is $0.52 (-27.8% Y/Y) and the consensus Revenue Estimate is $1.76B (-0.6% Y/Y). Over the last 2 years, KEY has beaten EPS estimates 63% of the time and has beaten revenue estimates 50% of the time. Over the last 3 months, EPS estimates have seen 3 upward revisions and 9 downward. Revenue estimates have seen 1 upward revision and 6 downward.
Shareholder Returns
| KEY | US Banks | US Market | |
|---|---|---|---|
| 7D | 8.3% | 5.5% | 1.3% |
| 1Y | -7.8% | -13.2% | -11.7% |
Return vs Industry: KEY exceeded the US Banks industry which returned -14.5% over the past year.
Return vs Market: KEY exceeded the US Market which returned -11.6% over the past year.
Price Volatility
| KEY volatility | |
|---|---|
| KEY Average Weekly Movement | 4.6% |
| Banks Industry Average Movement | 3.7% |
| Market Average Movement | 7.8% |
| 10% most volatile stocks in US Market | 16.9% |
| 10% least volatile stocks in US Market | 3.2% |
Stable Share Price: KEY is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 5% a week.
Volatility Over Time: KEY's weekly volatility (5%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1849 | 17,262 | Chris Gorman | https://www.key.com |
KeyCorp operates as the holding company for KeyBank National Association that provides various retail and commercial banking products and services in the United States. It operates in two segments, Consumer Bank and Commercial Bank. The company offers various deposits, investment products and services; and personal finance and financial wellness, student loan refinancing, mortgage and home equity, lending, credit card, treasury, business advisory, wealth management, asset management, investment, cash management, portfolio management, and trust and related services to individuals and small and medium-sized businesses.
KeyCorp Fundamentals Summary
| KEY fundamental statistics | |
|---|---|
| Market Cap | US$17.92b |
| Earnings (TTM) | US$2.14b |
| Revenue (TTM) | US$7.21b |
8.4x
P/E Ratio1.4x
P/B RatioIs KEY overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| KEY income statement (TTM) | |
|---|---|
| Revenue | US$7.21b |
| Cost of Revenue | US$0 |
| Gross Profit | US$7.21b |
| Other Expenses | US$5.06b |
| Earnings | US$2.14b |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Oct 20, 2022
| Earnings per share (EPS) | 2.30 |
| Gross Margin | 100.00% |
| Net Profit Margin | 29.72% |
| Debt/Equity Ratio | 163.5% |
How did KEY perform over the long term?
See historical performance and comparisonDividends
4.1%
Current Dividend Yield33%
Payout RatioDoes KEY pay a reliable dividends?
See KEY dividend history and benchmarks| KeyCorp dividend dates | |
|---|---|
| Ex Dividend Date | Aug 29 2022 |
| Dividend Pay Date | Sep 15 2022 |
| Days until Ex dividend | 17 days |
| Days until Dividend pay date | 34 days |
Does KEY pay a reliable dividends?
See KEY dividend history and benchmarksValuation
Is KEY undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
5/6Valuation Score 5/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for KEY?
Other financial metrics that can be useful for relative valuation.
| What is KEY's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$17.92b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | n/a |
| Enterprise Value/EBITDA | n/a |
| PEG Ratio | 2.4x |
Price to Earnings Ratio vs Peers
How does KEY's PE Ratio compare to its peers?
| KEY PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 12.9x | ||
CFG Citizens Financial Group | 11.3x | 8.1% | US$19.5b |
RF Regions Financial | 10x | 1.7% | US$21.2b |
HBAN Huntington Bancshares | 12.4x | 2.2% | US$20.5b |
FCNC.A First Citizens BancShares | 17.9x | 18.5% | US$13.1b |
KEY KeyCorp | 8.4x | 3.4% | US$17.9b |
Price-To-Earnings vs Peers: KEY is good value based on its Price-To-Earnings Ratio (8.4x) compared to the peer average (12.9x).
Price to Earnings Ratio vs Industry
How does KEY's PE Ratio compare vs other companies in the US Banks Industry?
Price-To-Earnings vs Industry: KEY is good value based on its Price-To-Earnings Ratio (8.4x) compared to the US Banks industry average (9.9x)
Price to Earnings Ratio vs Fair Ratio
What is KEY's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 8.4x |
| Fair PE Ratio | 13.5x |
Price-To-Earnings vs Fair Ratio: KEY is good value based on its Price-To-Earnings Ratio (8.4x) compared to the estimated Fair Price-To-Earnings Ratio (13.5x).
Share Price vs Fair Value
What is the Fair Price of KEY when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: KEY ($19.21) is trading below our estimate of fair value ($42.59)
Significantly Below Fair Value: KEY is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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Future Growth
How is KeyCorp forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?
Future Growth Score
1/6Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
3.4%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: KEY's forecast earnings growth (3.4% per year) is above the savings rate (1.9%).
Earnings vs Market: KEY's earnings (3.4% per year) are forecast to grow slower than the US market (14.5% per year).
High Growth Earnings: KEY's earnings are forecast to grow, but not significantly.
Revenue vs Market: KEY's revenue (3.5% per year) is forecast to grow slower than the US market (8% per year).
High Growth Revenue: KEY's revenue (3.5% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: KEY's Return on Equity is forecast to be low in 3 years time (13%).
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Past Performance
How has KeyCorp performed over the past 5 years?
Past Performance Score
2/6Past Performance Score 2/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
12.3%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: KEY has high quality earnings.
Growing Profit Margin: KEY's current net profit margins (29.7%) are lower than last year (31.2%).
Past Earnings Growth Analysis
Earnings Trend: KEY's earnings have grown by 12.3% per year over the past 5 years.
Accelerating Growth: KEY's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: KEY had negative earnings growth (-4.2%) over the past year, making it difficult to compare to the Banks industry average (8.8%).
Return on Equity
High ROE: KEY's Return on Equity (15.6%) is considered low.
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Financial Health
How is KeyCorp's financial position? (This company is analysed differently as a bank or financial institution)
Financial Health Score
6/6Financial Health Score 6/6
Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans
Financial Position Analysis
Debt to Equity History and Analysis
Balance Sheet
Financial Institutions Analysis
Asset Level: KEY's Assets to Equity ratio (13x) is moderate.
Allowance for Bad Loans: KEY has a sufficient allowance for bad loans (242%).
Low Risk Liabilities: 85% of KEY's liabilities are made up of primarily low risk sources of funding.
Loan Level: KEY has an appropriate level of Loans to Assets ratio (60%).
Low Risk Deposits: KEY's Loans to Deposits ratio (76%) is appropriate.
Level of Bad Loans: KEY has an appropriate level of bad loans (0.4%).
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Dividend
What is KeyCorp current dividend yield, its reliability and sustainability?
Dividend Score
6/6Dividend Score 6/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage
4.06%
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: KEY's dividend (4.06%) is higher than the bottom 25% of dividend payers in the US market (1.5%).
High Dividend: KEY's dividend (4.06%) is in the top 25% of dividend payers in the US market (4.05%)
Stability and Growth of Payments
Stable Dividend: KEY's dividends per share have been stable in the past 10 years.
Growing Dividend: KEY's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (33.4%), KEY's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: KEY's dividends in 3 years are forecast to be well covered by earnings (37.9% payout ratio).
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Management
How experienced are the management team and are they aligned to shareholders interests?
7.3yrs
Average management tenure
CEO
Chris Gorman (61 yo)
2.92yrs
Tenure
US$8,653,484
Compensation
Mr. Christopher Marrott Gorman, also known as Chris, has been Chairman and Chief Executive Officer at KeyCorp since May 01, 2020 and serves as its Director since September 19, 2019. He served as its Chief...
CEO Compensation Analysis
Compensation vs Market: Chris's total compensation ($USD8.65M) is below average for companies of similar size in the US market ($USD12.88M).
Compensation vs Earnings: Chris's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
Leadership Team
Experienced Management: KEY's management team is seasoned and experienced (7.3 years average tenure).
Board Members
Experienced Board: KEY's board of directors are considered experienced (9.2 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
KeyCorp's employee growth, exchange listings and data sources
Key Information
- Name: KeyCorp
- Ticker: KEY
- Exchange: NYSE
- Founded: 1849
- Industry: Regional Banks
- Sector: Banks
- Implied Market Cap: US$17.916b
- Shares outstanding: 932.66m
- Website: https://www.key.com
Number of Employees
Location
- KeyCorp
- 127 Public Square
- Cleveland
- Ohio
- 44114-1306
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/08/11 00:00 |
| End of Day Share Price | 2022/08/11 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.